The Study On The Average Ownership System Of Rural Land & Corporation Operation Scaled In The Process Of Agricultural Industrialization

While the China's long-term farming economy has sustained to a large degree the growth of Chinese population, it gives rise to the constraint of industry and commerce. The harsh demographic growth finally has turned "the intense tension between land and people"to a strong resource constraint which has confined the prosperity of industry for a long time. The peripheral political tense and the idea of "powerful industrial country"after the foundation of New China are bound to stimulate the formation of new strategies, casting new nation-wide impetus to accelerate the development of heavy industries. In order to cut off the transaction cost with billions of farmers, the government adopted a "triple"strategic policy including drawing out full bill of agricultural surplus by concentrating the farm land, and drawing out all urban surplus through urban-suburban division and controlling urban citizen's income, and thus established a comparatively consummate national economic mechanism in a nation-wide scale.Whereas the distribution mechanism that conventionally allocated the living material according to heads number has led to the growth of population and input constraint, which further receded the endowment conditions and ultimately gave birth to the automatic disintegration of urban collective economic system, and resumed the assignment of private using of farm land. Since the continuous tense between people and land had been a rooted impediment, the fractionizing of farm land's ownership has now become an inevitable choice for stability of urban social economy, yet which then leads to the fracturing characteristics of agricultural operation. Under the condition that our government could not afford to the basic sustenance function of agricultural population, the function naturally falls back to the farm land. And at the same time our government strives at their outmost to ensure the persistent stability of private using of farmland through collective ownership, banning of market circulation and constancy of responsibility system in 50 years.However, because of this, it creates the current situation of low merchandising rate of products of non-basic ensuring functions of farmland, and the handicapped development of farmland's scaled operation through converging the market forces. The stimulation of "responsibility system "and dual effects of agricultural technological development has worked out a constant increase in farmland productivity, and turned the conversion of farmers'initial focus on subsistence to now marketabilization. Confronted with enormous demand of farming product, the "fracturing"characterized small-scale farming economy will surely lead to the birth of tortured high transaction costs and extremely high market risks.The pursuit of scaled operation then becomes the pressing demand for marketabilized economy of billions of farmers after their satisfying the basic requirement for subsistence. On the other hand, with the rise of living standards of urban citizens, the original state-monopolized operation pattern of farming product circulation has now been a far cry from that which is capable of fulfilling the people's demand for fresh farming products. Market impetus characterized by a conspicuous convergence to large-scale capital has now begun to take birth in the farming products circulation fields with which agricultural circulation enterprises spring up promptly. Purposed to guarantee the stable farming product sources, both agricultural circulation enterprises and numerous small-sized economies should set out to handle the problems of increasing transaction cost and rise of market risks. Thus it becomes an urging priority for agricultural enterprises to organize their suppliers in considerable dimensions. Therefore, under the dual influences of average ownership system of farming land and constant demand for farming products in circulation market, agricultural scaled operation takes its birth. Based on practical constant above, this article conducts the analysis to agricultural scaled operation under average ownership system of rural land in following phases and proposes several following views: First of all, the realization of agricultural scaled operation should be via the form of agricultural corporation operation. The current condition of agricultural operation under average ownership system of rural land is that the disorganization of disparate agricultural operation stemming high bill of transaction cost and "corporations& farmers"organization pattern of scaled operation will both inevitably give birth to high-rocketed default ratio and a further stimulus of high transaction cost under the handicapped mechanism of farming products circulation markets.This paper, as far as the current situation of the former, proves that the way to reduce transaction cost should be in the form of agricultural industrialization, and as for as the later, by transaction cost theory, proves that we still can't reduce transaction cost efficiently with "order agriculture"working as the organizational mode of agricultural industrialization. Therefore, the paper suggests that the industrialization to cut down transaction cost efficiently is "agricultural industrialization in the form of corporation operation", which transform the market transaction between farmers and companies into the companies'internal operation. This paper also establishes that it's the only way to efficiently reduce the transaction cost in the process of agricultural industrialization is the implementation of this kind of transformation. Secondly, propose that corporation operation on farm products market is the implemented pattern of corporation operation scaled in agricultural circulation. In order to implement companization in the process of agricultural industrialization, we need to implement corporation operation in farm products circulation firstly. But the circulation process goes into two poles after averaging farmlands: one is governmental monopolized managing, the other is individual management by peasants. Thus, there are two market structures, monopolistic market and competitive one. Both of them can drive up infinitely the transaction cost. The structure of industry with balance between competitive and monopolistic can reduce transaction cost efficiently. Hence, we present the companization implementation mode in the industrialization process of circulation by the theory of transaction cost synthetically and analyzing present market characteristics of our farm products in circulation process roundly. This mode has many market characteristics as follows: first of all, reduce large transaction cost efficiently in circulation process which is caused by the high exclusive assets, the big uncertainty and high frequency in transaction. Secondly, SCP analyzing frame in the theory of Industrial Economics told us the performance is determined by activities and the activities is determined by the structure of the market. However, corporation operation mode is goof performance by operating companization, and can promote organization in agricultural industrialization to form reasonable market structure,thus it can bring normative activities. Finally, seen from present "order agriculture"of Industrialization management pattern, the theory about incomplete agreement can explain why agreements about farm produce have low rate of fulfilling on condition of present handicapped policies of market economy. The ultimate reason is innate incompletion of the agreements. This character can drive up infinitely the transaction cost by market uncertainty. All of these prove that using the pattern of corporation operation in farm products circulation can reduce transaction cost efficiently and enhance the rate of fulfilling in "order agriculture". Thirdly, propose how to implement low cost in the process of scaled running in agricultural production. The writer proposes four issues. First, adopting implementation pattern of varying land ownership can translate the relationship between farmers and enterprise from commodity buy-sell to manufacture-manage by the theory of Institutional Economics. Second, none can eliminate "order agricultural"obstacle about fulfilling, but bring farmers into enterprise and implement companization in agricultural production, considering the truth of agricultural production divided in pieces because of averaging the land ownership. Third, how to implement low cost equilibrium in the process of companization with incomplete information is keeping a balance between the enterprise's marginal income brought from increasing low efficient farmer's production and enterprise's marginal cost brought from the farmer's information rent who own high efficiency. Four, found choosing regulation to promote high efficient farmers and enterprise to sign production agreements, thus establish long time relationships with high efficient farmers already chosen, meantime, implement low cost equilibrium in the process of production companization,by designing agreements, providing utility-maximization choices of rent for farmers with different efficiency and designing strictly minus utility for low efficient farmers. Finally, present the role government plays in the scaled agriculture management under opening condition. Under opening condition, agriculture begins to have international competition in home market, so government must strengthen the support for agriculture. Under the arrangement of property right institution about averaging farming landownership, we investigate constructing reasonable market structure for scaled agricultural organization and standardizing agricultural enterprises'competing activities on condition of opening home and international market ,then propose government oriented scaled agricultural management by policies. All of these are to provide theory for enhancing agricultural industrialization management efficiency and to advance the goal of agricultural Industrialization in the macro policy layer. All of these shows that scaled agricultural management need companyization to implement under averaging farm land ownership. The implement pattern displays corporation operation in circulation market with reducing transaction cost in circulation efficiently, and a process of companization about designing reasonable agreements to choose high efficient farmers ,thus improving production efficiency and cutting down production cost in the process of production.